Retirement Plans Newsletter

November 6, 2018

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Estate Planning with Retirement Plans and IRAs: How to Do It Right
November 15, 2018 WEBCAST
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The Inside Scoop on Pension Plan Termination: What to know before you start
December 5, 2018 WEBCAST
Findley

2019 Business Management Conference (BMC)
January 12, 2019 in AZ
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[Guidance Overview]

New DOL Rules Offer Limited Expansion of Retirement Plans for Small Employers

"[S]ome associations that have been interested in sponsoring [Association Health Plans (AHPs)] may also be interested in sponsoring [Association Retirement Plans (ARPs)] covering small companies, and more small companies could turn to PEO-sponsored plans. But real growth in the area is not expected until financial firms are able to offer 'open MEPs' to any employers who want to participate and pool their plan assets."
Davis Wright Tremaine LLP

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[Guidance Overview]

2019 Cost-of-Living Adjustments on IRS Benefit and Contribution Limits

"Most of the general pension limitations, including the limit on annual compensation that can be taken into account and the individual limits on elective deferrals and annual contributions, will increase based on the cost-of-living index. The individual limits on catch-up contributions for participants age 50 and over will not change for 2019."
Ogletree Deakins

Do You Need to Send an Annual Notice to Plan Participants?

"[A] table provides a list of the content and deadlines for the most common notices that plan sponsors may need to distribute.... [1] Traditional safe harbor 401(k) notice; [2] Qualified Automatic Contribution Arrangements (QACA) notice for a safe harbor 401(k); [3] Eligible Automatic Contribution Arrangement (EACA) notice; [4] Qualified Default Investment Alternative (QDIA) notice; [5] Non-safe-harbor automatic contribution arrangement notice; [6] Annual participant fee disclosures."
Alston & Bird

How Early Can a Participant Take RMDs?

"To be eligible to take an RMD, a participant must wait until his or her initial 'Distribution Calendar Year.' This is defined as the year in which the participant turns age 70‑1/2. Connecting the dots, your participant could take her distribution at any point during 2019 to satisfy the RMD."
DWC

Consistent 401(k) Participation Leads to Higher Account Balances (PDF)

"The average 401(k) plan account balance of the consistent participants grew at a compound annual average rate of 14.2 percent, from 2010 through year-end 2016, to $167,330.... Among the group of consistent participants, 26.4 percent had more than $200,000 in their 401(k) plan accounts at their current employers, while another 18.4 percent had accumulated between $100,000 and $200,000."
Employee Benefit Research Institute [EBRI]

[Advert.]

J.P. Morgan Retirement Link: Turning retirement resolutions into reality

Sponsored by J.P  Morgan Asset Management

Our 2018 survey finds that although DC plan participants are making progress and gaining confidence overall, more work is needed to: understand the state of the participant, motivate participants to save, and streamline investment decision-making.


Editor's Pick A Brief History of 401(k) Plans (PDF)

"Congress acted in 1986 to replace the defined benefit plan for federal civilian workers (CSRS) with a less generous defined benefit plan (FERS) and a generous 401(k)-type plan (TSP).... Since that time, 401(k) plans have become the fastest-growing type of retirement plan in the United States. This brief history tracks key events in the development of 401(k) plans."
Employee Benefit Research Institute [EBRI]

Editor's Pick 2019 Planning for ERISA Multiemployer Defined Benefit Plan Operations

"Brush up on the Multiemployer Pension Reform Act of 2014.... Update the 'Special Tax Notice' for eligible rollover distributions.... Review and analyze insurance coverage.... Get set to trigger automatic payments.... Identify lost participants with vested benefits.... Evaluate the need for plan amendments -- and deadlines.... Consider mortality and other assumptions.... Address escalating PBGC premiums.... Create or update your investment policy statement."
Buck

Volatility-Based Investment Strategies and Their Fit in Defined Contribution Retirement Plans (PDF)

"While these strategies all incorporate volatility considerations into their respective methodologies ... [the] differences in how they are constructed have significant implications across different market conditions, as manifested in their varying performance results.... This article compares and contrasts three volatility-based strategies and discusses the implications, for both DC retirement plan sponsors and participants, of applying them in a plan."
Milliman

Editor's Pick Retirement, Income and Risk: Second Biennial Study on the American Retirement Experience (PDF)

23 pages. "As reported in the 2016 inaugural study, pension income is a significant component of retirees' financial and overall security -- in 2018 this continues to be true, with important implications for current and future generations of active and retired American workers. This year's report will look at how guaranteed income, be it Social Security, pension, or annuities, is the rebar that strengthens the road to and through retirement."
Insured Retirement Institute [IRI]

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Do Unpaid Caregivers Save Less for Retirement?

"[C]aregiving further exacerbates an already existing retirement income security gap by gender. The data thus lend support to efforts to increase access to retirement savings plans for people with less job stability and fewer hours and to give more people paid sick leave at their job."
The Journal of Retirement; subscription or purchase required for full article

[Opinion]

The Fiduciary Parent: How to Best Protect Your Child From the Day When the Promise of Social Security Finally Fails

"It goes without saying that compound interest is in the child's best interest. As with most of life's lessons, there's not time like the present to begin learning.... Ultimately, though, it all comes down to building a consistent savings habit. And by saving, we mean saving in the right vehicles."
Fiduciary News

Benefits in General

How to Defend an ERISA Lawsuit

"One of the earliest actions taken may be the filing of a motion to dismiss.... Class actions can be more difficult and expensive to defend. Fortunately, it is possible to resist class certification using Rule 23(b)(3).... It is crucial to make sure your plan documents include language about forum selection, fiduciary duties, and Firestone deference."
Hall Benefits Law

Executive Compensation
and Nonqualified Plans

Executive Compensation in the Banking Industry

"Short-term incentive program designs are generally consistent with last year, as banks have already adapted to regulator and shareholder preferences.... While the structures of long-term incentive plans have stabilized, many banks continue to refine performance measures and goals to ensure alignment with shareholders and strategic priorities.... For annual incentive plans, the median maximum opportunity is 150% of target. Among larger banks with specified maximum payout levels, a slight majority use maximum awards of 200% of target."
Meridian Compensation Partners, LLC

Selected Discussions
on the BenefitsLink Message Boards

Housing Allowance Distribution Counts Toward Required Minimum Distribution?

A minister's housing allowance is excludable from gross income for income tax purposes. Considering Treas. Reg. 1.401(a)(9) Q&A-9, would a distribution made for a housing allowance count toward satisfying the RMD for a participant?
BenefitsLink Message Boards

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Press Releases

ACEBC Announces Winners of the Inaugural Simplification Award
American College of Employee Benefits Counsel

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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